(Adds earnings release, context)
By Asher Levine
SAO PAULO, March 28 Brazilian state-run
electricity utility Eletrobras posted a net loss of
5.5 billion reais ($2.42 billion) for the fourth quarter as it
continued to adapt to government-mandated tariff reductions, the
company said on Friday.
The figure compares to a net loss of 10.5 billion reais a
year earlier and a 915 million reais loss in the third quarter.
Eletrobras agreed in late 2012 to a government plan to renew
expiring hydroelectric dam concessions in exchange for
electricity rate cuts of between 18 percent and 32 percent.
The changes weighed on profits throughout the year and
continued to hamper the company as net revenue dropped to 6
billion reais from 8.2 billion reais a year earlier.
Operational provisions totaled about 3.7 billion reais in
the quarter due to the write-down of some generation assets,
including 532.5 million reais of assets from its Eletronuclear
The company is struggling to adapt to the new reality of
lower rates by cutting costs and reorganizing its management
structure, which is spread across a range of subsidiary
Eletrobras expects to wrap up the restructuring by July,
according to a securities filing on Friday, and plans to invest
60.8 billion reais ($26.8 billion) through 2018 on expanding and
modernizing its generation, transmission and distribution
Last year the company said it planned to spend 1.4 billion
reais to cut 5,000 jobs as it embarks on a three-year turnaround
effort aimed at slashing costs by 30 percent.
On Friday Eletrobras said 4,200 employees had taken part in
buyout offers last year, which should lead to 1.13 billion reais
in savings. Fourth quarter results showed a 44 percent increase
in personnel, material and services expenses from a year
earlier, partly due to costs related to the buyout program.
At 11:24 a.m. (1424 GMT), Eletrobras' common shares
were up 0.5 percent.
The shares soared almost 10 percent on Thursday after a poll
showed a decline in President Dilma Rousseff's approval rating.
Traders said a new, more business-friendly administration would
be more likely to help the company return to profitability.
($1 = 2.27 Brazilian reais)
(Reporting by Cesar Bianconi; Editing by Lisa Von Ahn and